tv First Up With Angie Lau Bloomberg September 17, 2015 7:00pm-8:01pm EDT
♪ >> in light of heightened uncertainties overwrote and the pat for inflation, the committee judged it appropriate to wait for more evidence. angie: holding fire. the fed decides not to move on interest rates over concerns about the global economy. market movements. treasuries rarely the most since 2009 -- rally the most since
2009. aboutconfirms concerns the economic slowdown ways heavilyon the -- weigh on the fed's decision. i am angie lau coming to you from our headquarters in hong kong. let's get to our reporter gina who was at the news conference in washington, d.c. what are the major concerns? the fed is clearly concerned about the international outlook. they decided that as the reason they did not go this month. that we are looking at the data, coming in. janet yellen talked about the economic outlook in the u.s. being in line with what they expected during the press conference but at the same time pointed to international concerns over the stronger doll -- strong dollar.
rishaad: -- angie: how long do they hold it off for? jeanna: that is a great question. so they have two more meetings this year, one in october and what in december. in december. theoretically they could raise rates at either of those but the october meeting is just six weeks away and the december meeting is at a point of volatility in the markets that we are not sure if they are concerned about. it also is not much more data, more time for the market to recover. you raise the probable it could be as late as 2016 at this point. -- problem it could be as late as 2016 at this point, some economists are saying. you could make markets think that any source of uncertainty means you will delay and the fact does not want to surprise the market because that will
cause unneeded volatility so that is another risk of not hiking in september. angie: i want to ask you about inflation because the last time we heard direction on inflation was stanley fischer at jackson hole. he wasfor that the -- firm that the expectation would increase. how has the reaction changed? jeanna: it was interesting today because like you said stanley fischer sounded confident. more concerned that these developments abroad go to have some effect on inflation -- have some effect on inflation and hold it down which we have not seen before. again, janet yellen reiterated that we are seeing pretty stable inflation expectations and the fed cares about those but definitely a little more-glory worriedflation -- more
about inflation than we have seen in the past. angie: how did the economist you spoke with react? jeanna: a lot of them mentioned that they do not know what to think coming out of the meeting because we do not have a clear map going forward until the end of the year for what the fed is looking at. they are obviously looking at economic data. paying some amount of attention to what is going on in markets and abroad. what is the reaction function? what is going to make them stop and decide it is time to go? that was the big take away from all of the economists that i talked to. a degree of uncertainty. angie: a lot of attention being paid to this press conference. our reporter in washington, d.c. the fed might not react to the market but the market reacts to the fed. let's go to su keenan for the roundup.
was there an immediate reaction? su:mmediate action: -- immediate action. thats jumped, you can see on the chart, and then during the press conference, you saw a stronger reaction. the rally evaporated. did the fed know something we did not? does it say more about the world economy than they are letting on? they are focusing on the world economy. as a result, the s&p ended with a loss. at one point it was up 1.3% at the start of the speech. it began cleared during the conference that the fed was focused on international risk. it became clear that they were dovish, different than we thought. >> there was a plausible case that the fed would look [ast
the volatility -- past the volatility caused by charter and that led them to delay it. su: that was the disconnect. it was not expected that they would raise rates but those who thought that they might or did not have a stronger statement about they are going to do it soon, i am very disappointed. as janet yellen explained the views, treasuries rallied, with yield falling. we have the dollar fall, with a low in the session when she spoke in voice concerns about andation being below target that in labor market might bolster confidence. sincex fell to the lowest august and we had oil fall, after climbing almost 6% on wednesday as of the unexpected supply drop. -- wednesday because of the unexpected supply drop.
some are saying that this puts the focus on the weakness in china and emerging markets and a rough time on the earnings fronts. what does it say about corporate earnings, investors are asking. in stocks, somewhat telling, although s&p futures are showing we are on track to open higher. some traders believe there is a cloud over trading in the short-term. back to you. angie: let's see if the blood clot extends to asia in our part of the world. su keenan, thanks for that. let's check the asian market. zeb eckert is monitoring early indications. zeb: pleased to report that we are seeing some leadership in the markets from the asia-pacific this morning. check out yesterday's trading action, mixed across the region. new zealand is the only market but is open so far.
australia in just under an hour. the topic the index in wellington posting again. posting again.c -- posting a gain. 2% and effecteing factor limited up 1.5%. to the downside, kathmandu down 2% and pacific edge. the new zealand exchange down about 1%. that is what we are seeing in terms of equities but watch closely because china, the big concern in washington for janet yellen and the members. as we near the open of the chinese markets it will be interesting to see if asia investors believe that as well. yesterday the shanghai composite closed 2% lower, continuing the big drops we have been seeing. the hang seng lower by .5%.
commodity currencies, not benefiting from the move. emerging-market currencies are likely to do so. the australian dollar is trading higher at $.71. days,k over the past two this is what we have in the australian currency. yesterday the aussie, finished lower. inay, upward movement reaction. as we look at the japanese yen, this is what we are seeing. ying andseen some yen bu that was the case. seeing weakness in the inverse relationship right now it 120.15. -- at 120.15. we are seeing a game so far and ain so far and we will see if that continues as the markets get underway. angie: you can get more on the
fed decision and all of the top headlines. all you have to do is head to the website. in other news, china's property market might be recovering despite the slowdown. there is a recovery in prices. bloomberg surveyed by expected to spread across more countries. loosenednment has reforms to buy property, but improving sales have not help to attract investors into the sector. real estate investment expanded at the slowest pace in 15 years. forced toght be thought using the jurors and smart phones and tablets after apple won a long-running fight. the u.s. government ruled that apple is entitled to a barrel order that will stop some features in phones. won a case in may of
last year in which samsung was found to have infringed patents. sony is upping the game and virtual reality, introducing 10 the playstation vr. the playstation brand is q2 revival efforts as it shifts away from the tv business to games and movies and image sensors. headsethoping that the will help to expand it over microsoft. >> in some ways it rewrites the roll block about how you can create -- rule book about how you can create games and what we are seeing, and i do this positively, is a large amount of interest in development work among smaller teams because it somethinge to create in vr that is very simple and still very magical. angie: after the break, how the world's largest money manager
tracking-- angie: stories making headlines, the japanese upper house descended into chaos as opposition lawmakers tried to stop a vote. s tried to jostle the chairperson. the billwent ahead and will go before the upper house for approval. prime minister shinzo all bay wants to change the pacifist constitution to allow the military to defend allies. reportedlyas arrested people allegedly involved in illegal fires in
southeast asia. the arrests are rare in indonesia but the national police chief says that the president instructed police to take a tough approach. the fires are lit each year to clear land. more than 130 other people are under investigation. recovery operations are under way after a powerful earthquake off the coast of chile forest 100 people to leave their homes. it triggered tsunami waves of up to five meters. at least 10 people have been reported killed but it appears lower than the hundreds who died in the last major earthquake in 2010. let's get back to the markets. treasuries rallied overnight after the fed decided to keep the stimulus on hold. the 2-year note tumbles the most. takes a look at gold, saved by
the fed. climbing. in the stock market, banks were hit. america tumbled 3% overnight, that is understandable. the s&p 500 fell 0.3%. the highest before the decision and then the selloff. let's get more with west coast ridge, global chief investment -- wes, global chief investment strategist joining us from san francisco. everybody was waiting for the fed decision. as you said, much to do about nothing. wes: it was anti-climatic. the fed did what the market expected if you look at the futures. there was a one in three chance that the fed would raise rates and they did not. while there was a tremendous amount of volatility after the
announcement to ended coast to where you were before hand. the big move on the day was as you would expect on the short end of the yield curve with two-year pulling back a bit. it looks like the fed will wait to pull the trigger. david: you are all about -- angie: you are all about the nuance, trying to figure out what the words mean. a soundbite from janet yellen during the conference, let's listen in to what she had to say a lot income inequality. janet yellen: to me, the main thing in the economy that monetary policy does is put people back to work. putting people back to work in seeing a strengthening in the labor market -- and seeing a strengthening of the labor market which has a disproportionately favorable effect on portable populations of the population. that is not something that increases income inequality. david: what i am hearing is not necessarily -- angie: what i am
hearing is not necessarily growth but stability. there is another nuance which is if you look at the labor market in the united states, you get a mixed picture depending on which you focus on. looking at the level of job creation, we are creating more jobs since the late 1990's. in that metric, the labor market is healthy. if you just look at non-front payroll growth, he would have raised the rate today. i think what janet yellen is referring to is the fact that wage growth has been stagnant. the increase in wages you would expect given the strength and job creation. was underat, the fed no pressure to raise rates. the problem is that wages, middle-income wages, have been stagnant for a long period of time. this goes back decades and arguably has more to do with structural factors in the global economy which raises the
question if there will be a the immediate future were this changes sufficiently interest rates which is interesting because they go back a long time. angie: as a money manager, you have to wait until october or december. what do you do? russ: with this off of the table for the time being, in october is unlikely, more likely december, in the immediate future, the markets will focus on fundamentals. what is the economic data out of china? how quickly is that economy slowing? in early october, the focus will shift to u.s. corporate earnings. my mind, those two will be more important drivers of performances than speculation about the fed. angie: what do you think is the sector in the u.s. right now in the equity space that is most well-positioned ahead of
corporate earnings and the slowdown in china? russ: it is a good question. technology looks to be reasonably valued and has some momentum. the reason i say that is that you are still seeing a shift in spending created by consumers away from other things towards technology. another sector again, also a benefit of shifting share within the united states, is health care. health care is not cheap and this is a strong sector for some time. but from a fundamental perspective, that is also a sector where i think you will see solid earnings. angie: at the end of the day, whether we like it or not, we all get sick. thank you so much for that. mobile chief investment strategist at black rock out of san francisco. lenderr news, hong kong
the bank of east asia has promised to take action to improve the performance of chinese business. this could lead to changes to the branch networks, ray nagin costs and problem loans -- raining in costs and problem loans. reigning in costs and problem loans. they are under pressure from an activist investor. japan has ended the equity buying spree. results. some of the first time they have offloaded shares since 2013. overseas investors dumped a record $11.8 billion in equities just last week. indonesia will put a priority on economic stability overgrowth according to the finance minister speaking ahead of the fed rate decision and after his own central-bank kept things under control. he said there were no easy solutions and that the current
rate is good for stability. we are already at a rate that is a good rate. still good for stability. at the same time it does not constrain the growth. the latest data that i can identify, the credit growth is more than 10%. on the first six months, below 5%. but now it is starting to go up to 11%. so what is a good sign. -- so it is a good sign. angie: coming up next, rugby fans, get ready for the world cup in england. the hosts are nervous ahead of the opening match. we will have more of that when "first up" returns. stay with us. ♪
angie: the moment rugby fans have been waiting for is almost here. it is the beginning of the eighth rub to be -- rugby world cup. england will kick off with a game against fiji. nerves,has admitted to describing fiji as extremely dangerous opposition. players have been followed by a loyal legion of fans and were presented with caps at sandhurst
military economy. the head coach says that the team is ready to go. we are prepared mentally and physically, to be emotionally ready for what will be ahead, not to be overcome by the hole location. -- whole occasion. angie: there are four matches after that one with ireland getting the campaign against canada going and friends taking on italy. franceore games -- taking on italy. three more games follow with wheels taking on uruguay and new zealand taking on argentina. we will bring it to you on bloomberg television with reaction from players and fans. all right, back to the top story right now. ands turn to social media seo people are reacting to the
fed rate decision. shery ahn? sherry: of course, this was the closest watched decision in years so a lot of reaction on social media. economics professor at the university of michigan saying yellin makingish sure that it is an inflation target and not a ceiling. now we have to hear speculation for the next three months. will they raise rates? will they not raise rates? another person from a financial services firm quoting the chief economist saying that the pace is more important. back to you, angie. angie: all right,
angie: it is 7:30 in hong kong. a clear view to pay. not sure if we are getting -- view today. not sure if we are getting clarity from the fed in the same way. we are 30 minutes away from the of trading in japan and south korea. you are watching "first up." ♪ angie: the top stories this hour. the federal reserve keeps the interest rate unchanged, showing reluctance to end an era of
record monetary stimulus in a time of market turmoil. the chinese slowdown and global turmoil swayed to the decision. -- swayed the decision. treasuries are the biggest beneficiary. 2-year note's are surging and gold is rescued. concerns about the global economy bolstering the case for safe haven. 30 minutes to go before the trading day gets underway. declinesre pointing to in the open after u.s. stocks close lower. 500s fell 1.5% after the fed statement. markets where on we are seeing gains in new zealand. the new zealand dollar spot is gaining. it have been weakening ahead of the fed decision. the decision was to have it unchanged and there we have it, it is gaining and we are
counting down to the openings in japan and south korea. let's head over to japan because the nikkei 225 close 1.5% higher. futures in chicago pointing to a lower open today. the dollar yen is weakening. have get more on japan, we eugene nakamura live for us in tokyo right now. what is the day going to look like in tokyo, do you think? eugene: it does look like we will get some selling at the open. not sure after that. japaneseake a look at stocks that have exposure to the emerging market. companies like daihatsu, suzuki, komatsu. keep a lookout on those because what happens to the emerging markets today will be a big dream. also keep in mind that japanese
markets are on holiday after today until thursday. a lot of the trading will be compressed. if you are a fundamental german japanese shares, sold today or wait -- fund manager with japanese shares, sold today or wait for a week. rge, japan is the big market in asia so that might dictate trading for the rest of the day in europe as well and america. a key market to look at. angie: absolutely, looking to japan for direction. as you said, it might be a unique day because it is going to be a market holiday for the next four days. the last market to get things done. which sectors do you think we should pay attention to? as i mentioned, i look at the emerging market, i would keep a lookout volume. the lasts been thin
few weeks, not a lot of confidence. if we have a sharp move upwards or downwards, keep an eye on the volume, as if it is heavy, it means that investors do have confidence in whichever way it is going, up or down. they will vote with their trading so keep a lookout for turnover. also, the general message from the fed. yellen was not comfortable with what is happening outside of the united states. very differentas than what the bank of japan said earlier this week. the governor came out and said that everything is fine. japan is fine and china is fine. we saw market gains in japan. they are being positive and inspiring confidence. in the short-term buying. we will see is yellen's reaction will inspire the opposite of that. keep in mind, a year ago in october, yellen came out in the
middle of the sellout and said everything is fine. a year ago, her words sparked a rally. we will see if the opposite happens today. she showss -- anxiety, does that transfer over? a lot of things to look at today. angie: we already saw that in treasuries and gold. yuji nakamura, good point. thank you so much for joining us of tokyo. let's get more reaction to the fed decision from bloomberg's first word reporter michael wilson, joining us in sydney. what has been the feedback from the traders that you have spoken to? michael: good morning, angie. in, the reaction overnight the spot and euro and dollar yen was largely expected. yen .5% stronger. those movements were beyond the
realm on the fact of the positioning going into the fed meeting was pared back. that, thereence of were no new positions. a few thoughts. it might've extended the move of little bit. it probably give the market a reasonable insight into what they can expect in terms of in october and december coming up. the fed will eventually pull the trigger. yellen'sward, janet comments about china of have a basically put the focus on europe and very much on china. looking forbe tothing, equities or bond, treat currency one way or another.
in particular, the currencies will field against, probably the aussie for barrier -- will feel the pinch, probably the aussie. angie: what should we look at going ahead? michael: i think for now data,ng, any growth equity data is doing quite well. any leading indicators that we will be focused on, obviously, with china and commodity prices and everything like that, it is going to be directly focusing, directly impacting prices in the asian day but with europe coming in, they have a different bunch of problems to deal with. the day is being broken up three ways now. it is not just a recurring theme
that hangs over the market because their air more traders to consider. are more traders to consider current mr. stevens at the moment is referencing last night -- consider. mr. stevens at the moment is referencing last night. if he does that you will see bonds up for a little bit and the aussie might rally what i would not say that. -- but i would not say that. angie: we will leave it there. our first word fx reporter out of sydney for us. a tech news, apple has won force samsungght to stop using features in tablets. we are following a new development in a four year dispute. what might samsung not be allowed to do? wethe features are things know and love. slide to unlock, auto correct, which i love and hate at the same time, and the quick links.
apple getting firepower. to give you perspective, back in may, they already won against samsung in this jury berdych last year. they also won a case over the design but at the time the judge an order for samsung to remove features and said that monetary damages were enough. apple appealed and won. some say this is an important precedent with far-reaching consequences with patent owners and how they will protect people from copying design. that ifs argued before they cannot control the use of their inventions they could lose market share as well as reputation of being an innovator on the line. angie: both of those have been criticized. but wait a second, you are talking about the slides to lock and autocorrect, these are
seeing.functions we are what does this ruling have in terms of impact on other smartphone makers? it is funny because in this case it was apple against samsung and that is all. htc, as well as lg among the companies backing arguments, saying if the decision would go through, this could mean and owners good leverage patterns and rights for competitive game. apple reached a settlement with htc back in the day to include this no cloning provision. this new provision does the same for other smart phone makers, for example the chinese companies trying to enter the u.s. market. that could be a new contender but new developments could be huge. angie: another hurdle in getting into the market. like you so much for that. sony has been -- thank you so much for that.
away fromeen moving unprofitable tv to move into other products like games and they are betting on virtual reality to boost growth. our technology reporter has more from tokyo. you were at the tokyo game show. it looks like you had a good time. did you check out the sony vr> -- vr? grace: i went to the booth but i did not have time because the line was so long. the sony booth was fully booked at the beginning 30 minutes of the show. of people but lot i have tried it before and i is a the vr headset fascinating product because it gives you an experience in a different environment, quickly bringing into the games. it is very interesting for that. angie: it is an interesting product that is getting crowded in the space.
forave oculus rift, vibe htc. how does that relate to the other products and when might we see these come to market? e: i have talked to the sony game division had and he says -- and he says that the sony playstation vr development is on schedule so we will see this coming to the market at the first half of next year. with,ill be competing angie, you mentioned oculus rift. which will come to the market earlier than sony. so there are analysts estimating that the market, it could be worth more than $60 billion. there is a huge market out there but the competition might become more fierce. speculatesfurther that we do not know whether apple will do something in the
vr field. no, very interesting to watch. thank you so much for that. respond out of tokyo. -- grace out of tokyo. we have breaking news. with rba governor getting his testimony to the parliament community as he appears before the house of representatives economic committee. he is making comments right now. he says the economy is not growing as fast as australia would like, as he would like. also saying that global rates will be quite low for some time. these comments come after the federal reserve chairman janet yellen decided to keep rates unchanged as well. everyone seeing the headwinds for the global economy, including in australia. he is also saying that he sees the possibility of further financial market volatility. those comments coming from rba governor glenn stevens appearing before the house of
fa's second-highest officials has been relieved of duties after corruption allegations. the right hand man has been implicated in a scheme to sell world cup tickets above face value and share of the profits. the allegations but the governing body has requested an investigation by the ethics committee. croatia has become the latest hotspot in the mass exodus towards western europe. thousands of asylum-seekers poured into croatia on thursday. people went into frames through windows. the head of the japanese immigration authority is stepping down. he came under fire for the handling of the refugee crisis
with germany's struggling to cope with thousands of migrants. that is five times last year's total. refugees could have a significant bearing on sunday's election in greece. os so that their decision would be affected by the crisis. the parties are among the front runners according to the latest surveys. one of the major challenges of the next century will be how to drastically cut consumption of dwindling resources while at the same time making cities better places to live. policymakers and ceos are meeting in singapore to explore how to do this. haslinda amin is covering the event for us right now. over to you.
morning, ang. singapore wants to be a trail blazer and they are betting billions of dollars. if you go to an area in the west of the country you will find a thousand sensors tracking and monitoring everything from crash two vehicles. to vehicles.sh why is it important for singapore being a smart nation? we are going to speak to a minister. good to have you with us. >> good morning. haslinda: why is it so important? >> as we have to. to.ecause we have the infocom's revolution, that wages not over. robotics and 3-d printing, the internet of things, big data analytics, these are not just tools, they are platform technology.
they will change the way we live, work, play, organize ourselves, our politics and economics and culture. all of that will be transformed. everybody who was not prepared for that is going to be in trouble. so firstly, we have to. the next reason is that we can. we are a city state, we are tiny. we can get the infrastructure right. mobilemake sure our every lift shaft, all the time. haslinda: you are saying it is not about technology. >> at the end of the day, it is about the impact on the quality of life and jobs and social cohesion. so really, technology is a tool. theif you do not understand technology, is your
infrastructure is not ready, your people are not ready in terms of skill and education, you will be in big trouble. haslinda: let's talk about the people because 40% of the labor in singapore still do not professional work. how do you hope to get to be a smart nation when your people do not seem to do any? >> that is why we have to change. in fact, if you look globally, risk ofobs or at robotics. the fact that manufacturing can be transformed. if you are going to 3-d print products, the shipping, all of that will be transformed as well. in fact, i am far more paranoid than that. you have to assume that we are facing an overhang of jobs and people need to be retooled, resell, re-educated. designing, to be creating, and controlling robots, rather than unsuccessfully competing with robots. haslinda: singapore is not the only country wanting to be a smart nation.
south korea wants to be the same. how do you view the competition? is it important for singapore to be first? >> i would put it this way. everybody needs to do it. second, this is a global economy. what you need is to be a part of the global value chain. yes, the more the merrier. that point i would make, we can beat silicon valley. silicon valley is unique in the world with the constellation of academic institutions, technology, and a smart manufacturing. the rest of us cannot be silicon valley. can do something better than silicon valley. i can make sure that broadband works better here than silicon valley. i can make sure your phone works. i can make sure that businesses here have sufficient incentives to improve the technology, to get the latest and best. there is there are a lot of government grants for that. labor force involved.
we have a prime minister who himself can code so we understand. we can translate plans into prototypes. we can make singapore a living laboratory. even if it is not invented here, we can deploy it here faster on a national steel. we can prove whether it works or does not work. if it works in singapore, we can then look for opportunities. haslinda: we can be a model. >> it is a living oratory of the future. haslinda: thank you so much for that. leading the initiative for the smart nation comes in the lion city. it is a model that can hopefully be replicated by everybody else. ang, back to you. angie: thank you for that. the me up next, a japanese shoemaker cuts the profit forecast. find out if that has
♪ all right, welcome to the stock exchange. we are taking a look ahead to the opens in australia, japan, and south korea and we have driven reporters here to tell us what stocks they are keeping an eye on. >> a fashion diamond. angie: is it your best friend today? >> there is a chance for that. a diamond tipped tool. we are talking about drills. [laughter] angie: i heard diamonds, i was thinking. a great monthave but they are going to buy back 1.7% of shares, $10 million. they rose the last two days and have two buys and one hold. angie: do we know the price?
sherry: i have no idea. there by 1.7% of shares. they are buying 1.7% of shares. $10 million. zeb: we like hard assets. well, i do. this is a biggie. erospace winning in order from the tie air force -- thai air force. they will be delivering the jets so that they can train on them in the skies above the land of saim. angie: very nice. .he skies of siam very elegant today. zeb: i am dreaming of them. yvonne: i am talking about a shoemaker. target bylashing the 38%.